Nine Energy Service, Inc. (NINE): PESTLE Analysis [Nov-2025 Updated]

You're trying to assess if Nine Energy Service, Inc. (NINE) can keep its strong run going, and the truth is, they're navigating a high-stakes environment where geopolitical stability and new EPA mandates clash with sustained oil demand. The 2025 fiscal outlook is solid-with revenue near $500 million, supported by an expected 5% to 7% growth in the US rig count-but they are defintely fighting a two-front war against inflationary pressure and the severe skilled labor shortage. We need to look past the top-line numbers and map the Political, Economic, Sociological, Technological, Legal, and Environmental (PESTLE) factors that will actually decide their margins and long-term viability.

Nine Energy Service, Inc. (NINE) - PESTLE Analysis: Political factors

Continued US federal and state policy uncertainty impacting drilling permits

You're operating in an environment where federal policy is aggressively pro-production, but state-level politics create significant, unpredictable friction. Since the new administration took office in January 2025, the Bureau of Land Management (BLM) has dramatically accelerated federal permit approvals. Between January 20 and October 7, 2025, the BLM approved 4,483 applications for permits to drill (APDs) on federal and Native American land, which represents a 73% increase compared to the same period in 2024.

This federal push, however, doesn't defintely translate to immediate work for Nine Energy Service, Inc. (NINE). Many Exploration & Production (E&P) companies are stockpiling these permits as a hedge against future policy shifts, not necessarily committing to drill them immediately, especially with volatile crude prices. Plus, state-level resistance remains a major headwind. In California, for example, new oil drilling permits have fallen by 95% over the past five years, a policy stance that has pushed more than 360 energy companies out of the state. That's a clear example of state policy directly undermining federal intent and creating a patchwork of operational risk for oilfield service companies like Nine Energy Service.

A minor, but important, risk is the intermittent threat of a federal government shutdown, like the one that loomed in October 2025. A shutdown can immediately stall the permit review process at the BLM and Department of the Interior, creating backlogs that delay new projects and investment decisions for NINE's clients. It's a sudden stop/start risk you have to factor into your short-term planning.

Geopolitical stability driving crude oil price volatility, affecting E&P capital expenditure

Geopolitical instability in 2025 has been the primary driver of crude oil price volatility, which directly impacts the capital expenditure (capex) of Nine Energy Service's E&P clients. You know that E&P capex is the lifeblood of the oilfield services sector, and when prices swing wildly, budgets get tightened or delayed. For instance, in a single week between June 12 and June 19, 2025, the price of Brent crude spiked from $69/b to $79/b following heightened tensions and strikes in the Middle East, only to decline back to around $70/b after a ceasefire.

This volatility, coupled with a bearish outlook from some analysts for late 2025, has led to a projected decline in North American E&P spending. Global E&P capex is expected to remain flat in 2025, but the U.S. is anticipated to see a spending decrease of 3.2%. This is what really matters to NINE, which is heavily focused on North American basins like the Permian and Eagle Ford. Some major operators are already acting on this caution, with Chevron announcing plans to reduce its Permian capex to between $4.5 billion and $5 billion in 2025, a drop of up to 10%. That means fewer wells, and less work for service providers.

Here's the quick math on the North American E&P spending forecast for 2025:

Any WTI price below the mid-$60s/b is enough to delay discretionary growth capex, even if it doesn't force dramatic budget cuts.

Potential reinstatement of stricter methane emission rules by the EPA in 2025

The regulatory landscape for methane emissions is a political football in 2025, creating significant compliance uncertainty. The new administration has actively worked to roll back the stricter methane emission rules finalized in 2024. The most immediate financial relief for the industry was the repeal of the Waste Emissions Charge (WEC) from the Inflation Reduction Act, which was set to charge emitters $1,200/tonne for 2025 methane emissions.

However, the underlying rules are still in flux. The Environmental Protection Agency (EPA) is currently reconsidering the 2024 New Source Performance Standards (NSPS OOOOb/EG OOOOc) and has already extended compliance deadlines for certain provisions, such as the 'no identifiable emission' standard for closed vent systems, until July 28, 2025. Furthermore, in March 2025, the EPA directed staff to stop prioritizing enforcement on methane emissions from oil and gas facilities.

This political action creates a short-term operational benefit for NINE's clients-lower immediate compliance costs-but introduces long-term regulatory risk. A future administration, or a court challenge, could quickly reinstate or strengthen these rules, forcing a sudden, large-scale capital outlay for equipment upgrades and new leak detection technologies. The industry is effectively operating under a temporary stay of execution.

Tax policy shifts concerning intangible drilling costs (IDCs) and accelerated depreciation

The most favorable political development for the oil and gas industry in 2025 was the enactment of the 'One Big Beautiful Bill Act' (OBBBA) on July 4, 2025. This legislation provides a substantial fiscal tailwind for NINE's clients, encouraging them to spend capital, which is good for your business. The core benefits center on two key areas:

• Accelerated Depreciation: The bill permanently restored and expanded first-year bonus depreciation to 100% for qualified property acquired after January 19, 2025. This means E&P companies can immediately deduct the full cost of new tangible drilling equipment, like rigs and wellheads, in the first year, significantly lowering their initial tax liability.
• Intangible Drilling Costs (IDCs): The legislation maintained the favorable treatment of IDCs-expenses like labor and drilling services, which are NINE's core offerings-allowing for their immediate expensing. Crucially, it also exempted IDCs from the calculation of the Corporate Alternative Minimum Tax (CAMT) for oil and gas companies, eliminating a potential 'giveback' on this deduction.

Additionally, for tax years beginning after December 31, 2024, the calculation for the Section 163(j) interest expense limitation was permanently shifted from using EBIT (Earnings Before Interest and Taxes) to the more favorable EBITDA (Earnings Before Interest, Taxes, Depreciation, Depletion, and Amortization). This change effectively allows companies with significant debt and capital expenditures to deduct a larger portion of their business interest expense, improving their free cash flow. This is a material benefit that helps E&P clients maintain financial flexibility even during periods of lower commodity prices.

Nine Energy Service, Inc. (NINE) - PESTLE Analysis: Economic factors

Sustained high oil prices (near $80/barrel) supporting strong demand for completion services

The economic foundation for oilfield services like Nine Energy Service rests on a favorable crude oil price environment. While the US Energy Information Administration (EIA) projected the West Texas Intermediate (WTI) spot price to average around $70.68 per barrel in 2025, other forecasts point to stronger pricing that directly supports completion activity. Standard Chartered, for instance, anticipated WTI to average $79 per barrel in the fourth quarter of 2025, moving to $82 per barrel in the first quarter of 2026.

This expectation of near-$80 oil prices, particularly in the latter half of the year, is crucial. Higher crude prices allow Exploration and Production (E&P) companies to maintain or slightly increase capital expenditure (CapEx), which translates directly into demand for NINE's completion tools and wireline services. The strong oil price environment is the primary economic driver offsetting the capital discipline E&P operators are still prioritizing.

Expected 2025 US rig count dynamics, increasing service utilization rates

The US rig count narrative in 2025 is complex, driven by efficiency gains more than raw growth. While some forecasts, like Spears and Associates, suggest the US Lower 48 rig count will remain flat year-over-year at approximately 587 rigs, the demand for high-spec equipment, which NINE provides, is still rising. Wood Mackenzie forecasts rig demand to increase by 40 units by the end of 2025, specifically led by gas plays and the Permian Basin.

This modest increase in demand for premium rigs, coupled with a significant shift toward natural gas drilling, is boosting service utilization rates for specialized equipment. Gas-focused activity saw a 15% year-over-year increase in rig count as of mid-2025, a critical indicator for NINE as it seeks to maximize asset turnover and pricing power. The industry is drilling more wells with fewer rigs-that's the quick math on efficiency.

Inflationary pressure on raw materials like steel and cement, squeezing service margins

Cost inflation presents a mixed but persistent challenge to Nine Energy Service's margins. While the broader oilfield services market saw a significant decline in some key inputs, others remained stable or increased, creating a nuanced cost structure for completion providers.

The cost of Oil Country Tubular Goods (OCTG), which is primarily steel, dropped by as much as 50% from its peak, offering some relief on the tubular side of the business. However, other essential consumables are seeing upward pressure. Drilling mud and cement, critical for cementing and completion operations, have remained stable or increased, with cement prices specifically rising by about 7%. This mixed raw material picture means NINE must manage its supply chain aggressively to prevent margin erosion, especially as pricing power for services remains competitive in a disciplined E&P environment.

• OCTG (Steel) Price: Down by up to 50% from peak, easing a major input cost.
• Cement Price: Up approximately 7%, creating margin pressure on cementing services.
• Sand/Proppant Prices: Declined, reducing the cost of hydraulic fracturing inputs.

NINE's estimated 2025 full-year revenue near $500 million, showing solid post-restructuring growth

Nine Energy Service is projected to achieve solid revenue growth in 2025, reflecting a post-restructuring focus on operational efficiency and international expansion. Analyst consensus forecasts place the full-year 2025 revenue for Nine Energy Service near $571.17 million. This figure is supported by the company's reported quarterly performance and guidance.

Here's the quick math on the near-term revenue picture, based on the first three quarters and Q4 guidance:

What this estimate hides is the domestic market share losses in the completion tool division, which management is addressing through real-time R&D to adapt to changing casing sizes. Still, the international tools business is a bright spot, with international revenue up approximately 19% for the first nine months of 2025 compared to the same period in 2024, driven by increased sales in the UAE, Argentina, and Australia. That international growth is defintely a key component of their revenue resilience.

Nine Energy Service, Inc. (NINE) - PESTLE Analysis: Social factors

You're operating in a highly specialized sector where the product is the expertise of your field crews. The social factors for Nine Energy Service, Inc. (NINE) are less about broad consumer sentiment and more about the intense, internal competition for talent and the external pressure from capital markets on safety and corporate responsibility. The core issue is that your most valuable assets-skilled labor and a clean safety record-are becoming scarcer and more scrutinized, directly impacting operational costs and access to capital.

Severe skilled labor shortage, especially for cementing and coiled tubing crews

The oilfield services (OFS) sector is grappling with a severe shortage of specialized, experienced workers, and this hits NINE's core services-cementing and coiled tubing-the hardest. These roles require a unique mix of technical knowledge and field experience, which takes years to build. Across the energy industry, an Accenture study projected a lack of up to 40,000 competent workers by 2025, a massive gap for specialized roles.

This shortage creates wage inflation and operational risk. For NINE, maintaining its Q4 2024 cementing market share of approximately 19% in its operating regions requires retaining and recruiting top talent. The company's successful completion of a landmark cementing job in the Haynesville Basin in Q3 2025 proves the capability of its current crews, but replacing or expanding those teams is defintely a challenge.

Here's the quick math on the labor market dynamics:

Increased public and investor scrutiny on the safety record of field operations

Field operations in completion and production services are inherently high-risk, involving heavy equipment, high pressures, and remote locations. For a company like NINE, a single major incident can trigger costly litigation and severe reputational damage, which directly impacts the stock price and customer confidence. The risk factors in the company's SEC filings explicitly highlight liabilities from accidents, explosions, and loss of well control.

Still, NINE has shown strong internal performance, which is a key selling point to risk-averse operators.

• Safety Improvement: NINE's Total Recordable Incident Rate (TRIR) declined by approximately 22% in 2024 compared to 2023.
• Benchmark: The company's 2024 TRIR was 0.49, which is significantly better than the overall Bureau of Labor Statistics (BLS) industry TRIR of 2.3 reported in 2023.

This superior safety record is a competitive advantage, helping to stabilize insurance premiums and attract customers who prioritize operational excellence. It's a non-negotiable metric for securing long-term contracts.

Growing pressure from institutional investors for transparent Environmental, Social, and Governance (ESG) reporting

Institutional investors are increasingly integrating Environmental, Social, and Governance (ESG) factors into their investment decisions, especially in the energy sector. This is not a soft trend; it directly affects NINE's cost of capital and stock valuation.

Major institutional shareholders, including BlackRock, Inc. and Vanguard Group Inc., hold significant stakes in NINE. As of September 30, 2025, NINE had 68 institutional owners holding a total of 10,202,059 shares. For example, BlackRock, Inc. increased its holdings by 65.312% in Q3 2025. These large funds actively use their voting power to push for better ESG disclosures, making transparency a core business requirement.

NINE has responded by launching its first Sustainability Report in 2024, a critical step toward meeting the 'S' (Social) and 'E' (Environmental) disclosure demands of its investor base. This reporting is essential for maintaining investor confidence and avoiding potential divestment from ESG-focused mandates.

Shifting workforce demographics requiring investment in automated training and retention programs

The younger generation's reluctance toward oil and gas careers-with 62% of Gen Z and Millennials finding the industry unappealing-exacerbates the labor shortage and forces NINE to invest heavily in both retention and technology-driven training. The average energy sector median wage was $58,810 in 2024, which is 18.8% higher than the national median, reflecting the need to pay a premium to attract workers.

To retain its existing, highly-skilled workforce, NINE offers strong benefits, including free healthcare for its single-employee population. Plus, the company is using technology to make its specialized services more efficient, which reduces the reliance on sheer manpower and increases the productivity of existing crews.

• Retention Strategy: Offering some of the best health benefits in the service sector.
• Training/R&D Investment: Management is focused on ongoing Research & Development (R&D) to adapt to customer needs.
• New Technology Training: The company is using a new completion tools facility with multiple test wells for real-time design and testing of tools under different pressures and temperatures, effectively automating parts of the training and validation process.

The company's capital expenditures for the first nine months of 2025 totaled $13.9 million, which includes investments in the equipment and facilities that support this advanced, automated training and R&D. This is a direct action to mitigate the demographic risk by boosting worker productivity.

Nine Energy Service, Inc. (NINE) - PESTLE Analysis: Technological factors

Rapid adoption of dissolvable plugs and composite frac plugs to increase well efficiency.

You need to pay close attention to the shift in completion technology, as the market is moving fast, and NINE is positioned right in the sweet spot. The industry-wide push for faster well-to-production times and reduced intervention costs has accelerated the adoption of dissolvable and composite frac plugs (temporary barriers used in hydraulic fracturing). This isn't a niche trend anymore; it's a core operational mandate.

The global dissolvable frac plugs market size is valued at approximately $3.35 billion in 2025, reflecting a strong compound annual growth rate (CAGR) of 6.3%. We're seeing a significant technological jump, with the adoption of fully dissolvable frac plugs increasing by nearly 35% between 2024 and 2025, a clear signal of market preference. Composite and dissolvable plugs are now utilized in over 40% of horizontal well completions, which is the dominant well type, representing 78% of total frac plug usage in shale formations in 2025. Honestly, this technology is a game-changer because it can reduce well completion time by a solid 20-30% for operators, cutting non-productive time (NPT) significantly.

Demand for higher-pressure pumping and cementing equipment for deeper, longer lateral wells.

The quest for maximum reservoir contact drives the demand for more robust, high-specification equipment. As operators drill deeper and extend laterals to lengths that were unimaginable a decade ago, the pressure requirements for pumping and cementing services have skyrocketed. This is a capital-intensive area, but it's essential for modern unconventional development.

The global pressure pumping market, which includes hydraulic fracturing and cementing, is projected to be valued at approximately $95.57 billion in 2025, with a forecast to grow at a CAGR of 6.85% through 2034. North America dominates this market, accounting for a 65% revenue share in 2024. NINE's cementing division is directly addressing this technical challenge. For example, their team recently executed a landmark cementing job for a large operator in the Haynesville basin, successfully placing a specialized latex-based cement slurry in an extremely narrow annulus (the space between the casing and the wellbore). This required pumping at increased rates but reduced pressures, demonstrating a high degree of technical expertise and specialized material science to maintain wellbore integrity in complex, high-pressure environments.

Increased use of data analytics and AI to optimize well-completion design and logistics.

The digital oilfield is here, and data analytics and Artificial Intelligence (AI) are moving from buzzwords to core operational tools. They are the invisible hand optimizing every stage of the completion process, from predicting the ideal frac stage spacing to managing complex supply chain logistics.

The North American Digital Oilfield Services market is expected to surpass $20,000 million by 2025, emphasizing the massive investment in this area. This adoption is not theoretical; it provides clear, measurable returns. For instance, the use of AI in well completions has demonstrably resulted in 25% more efficient hydraulics management, which is crucial for maximizing the effectiveness of each fracture stage. Plus, 70% of oil companies utilizing AI report increased operational efficiency, and AI-driven predictive maintenance can reduce equipment failure by up to 35%. This trend is defintely a risk for any service company that isn't investing heavily in digital integration, as non-digital competitors will struggle to match the efficiency gains of their digitally-enabled rivals.

• AI adoption in completions: 25% more efficient hydraulics.
• AI-driven maintenance: Reduces equipment failure up to 35%.
• North American Digital Oilfield market: Over $20,000 million by 2025.

NINE's focus on proprietary completion tools reduces reliance on third-party technology.

NINE's strategy hinges on controlling its own technology destiny, particularly in the high-margin completion tools segment. By developing and manufacturing proprietary tools, they reduce reliance on third-party vendors, which helps protect margins and allows for rapid, real-time tool customization based on customer feedback and changing well designs.

This focus is paying off: the Completion Tool business was a key growth driver in 2025. Completion Tool revenue for Q2 2025 was $37 million, representing a sequential increase of approximately 9%. The company's proprietary Stinger™ dissolvable frac plug is the flagship product, giving NINE a strong market position with a reported 20-25% market share in the growing U.S. dissolvable plug segment. Furthermore, their international tools business is a bright spot, with international revenue increasing by approximately 19% for the first nine months of 2025 compared to the same period in 2024. This growth is driven by sales of key proprietary products like multi-cycle barrier valves in the Middle East and plug sales in Argentina. The full-year 2025 capital expenditures guidance of $15 million to $25 million is intentionally disciplined, prioritizing R&D and technology development to maintain this competitive edge.

Nine Energy Service, Inc. (NINE) - PESTLE Analysis: Legal factors

Complex state-level regulations on hydraulic fracturing (fracking) fluid disposal and water use

You need to closely track the evolving patchwork of state-level regulations, especially concerning water management, because they directly impact your operating costs and customer demand. The federal Environmental Protection Agency (EPA) already prohibits discharging hydraulic fracturing wastewater to publicly owned treatment plants. This pushes the compliance burden-and cost-onto state-regulated disposal and recycling methods.

A major near-term legal change is happening in Texas, a core operating region. The Railroad Commission of Texas is implementing new oil and gas waste management rules, set to go into effect on July 1, 2025. These rules, which replace the decades-old Statewide Rule 8, introduce stricter engineering controls, design standards, and closure requirements for disposal sites, including those handling produced water and fracking chemicals. This shift is designed to protect groundwater, but it will defintely increase the compliance complexity and capital expenditure for operators and service providers like Nine Energy Service, Inc.

Plus, in drought-prone operating regions, the availability and cost of water for fracturing operations remains a significant legal and operational risk. That's a direct cost-of-service risk, not just a regulatory hurdle.

Ongoing compliance burden from SEC rules regarding climate-related financial disclosures

The Securities and Exchange Commission (SEC) climate disclosure rules, adopted in March 2024, represent a major potential compliance shift, but their immediate burden is currently paused. The SEC voted to end its defense of the rules and stayed their effectiveness on March 27, 2025, pending the outcome of consolidated litigation.

So, while Nine Energy Service, Inc. is not currently obligated to report the full scope of the proposed climate-related disclosures, the legal risk remains a future cost. If the rules are upheld or revised versions are implemented, the company will face new requirements for disclosing:

• Material impacts of climate-related risks on strategy and outlook.
• Governance and risk management processes for these risks.
• Greenhouse Gas (GHG) emission reporting (Scope 1 and 2, if material).

For now, it's a compliance risk on the bench, but one that demands internal preparation for data collection and reporting infrastructure. Don't wait for the final court ruling to start building your data framework.

Risk of litigation tied to legacy environmental liabilities from previous oilfield operations

The nature of the oilfield services industry means Nine Energy Service, Inc. carries an inherent risk of environmental liability and related litigation. The company is subject to laws where it may become liable for penalties, damages, or remediation costs. While no specific, material legacy litigation with a dollar amount has been disclosed in the 2025 filings, this risk is persistent.

Litigation can stem from claims for personal injury or property damage related to past operations, and a judgment against the company could materially affect its financial condition. This is a low-probability, high-impact risk that requires continuous, rigorous management of historical environmental data and site remediation efforts.

Need to manage debt covenants and ensure compliance following the 2024 financial restructuring

The most immediate and critical legal factor for Nine Energy Service, Inc. in 2025 is managing its debt obligations and maintaining compliance with its new credit facility covenants. On May 1, 2025, the company closed a new Asset-Based Lending (ABL) Credit Agreement, a $125 million revolving credit facility, which matures in May 2028.

The key covenant is the minimum fixed charge ratio of 1.10 to 1.00. This ratio is only tested quarterly when the available borrowing capacity under the ABL facility falls below $10 million. This structure provides flexibility, but the company's liquidity position is tight.

Here's the quick math on the liquidity position as of late Q3 2025:

S&P Global Ratings revised the company's outlook to negative in June 2025, specifically citing the risk of a covenant breach within the next 12 months, due to the forecast for negative free operating cash flow (FOCF) for the full year 2025. The company's liquidity is expected to be further reduced by approximately $2.2 million on October 31, 2025, and again on November 30, 2025, and December 31, 2025, due to a lower appraised inventory value impacting the borrowing base calculation. This shrinking availability increases the risk of triggering the 1.10x fixed charge ratio test.

Finance: Monitor ABL availability weekly, especially as the borrowing base is reduced, to ensure it stays well above the $10 million trigger threshold.

Nine Energy Service, Inc. (NINE) - PESTLE Analysis: Environmental factors

Stricter federal and state mandates on limiting methane leakage from well sites.

You need to understand that regulatory pressure on methane emissions is not just a future risk; it's a current, high-cost operational reality, even with recent political shifts. The Environmental Protection Agency (EPA) finalized new source performance standards (NSPS OOOOb) and emissions guidelines (EG OOOOc) in 2024, which mandate extensive leak detection and repair (LDAR) programs for both new and existing oil and gas facilities.

For a services provider like Nine Energy Service, Inc., this translates directly into the need for clients to invest more in compliance services and equipment, which can be an opportunity if the company offers the right technology. Still, the regulatory landscape is volatile. For example, the Waste Emissions Charge (WEC) from the Inflation Reduction Act, which would have imposed a fee of $1,200/tonne on methane emissions exceeding specified thresholds for 2025, was prohibited by Congress from collection until 2034 in March 2025. That's a huge cost bullet dodged for the industry, but the underlying pressure remains.

The EPA's Methane Super Emitter Program, which uses third-party monitors to identify leaks of 100 kg of methane per hour or more, is still a major factor. This pushes operators to demand better-sealing completion tools and cementing services, which is a core business area for Nine Energy Service.

Pressure to reduce the carbon footprint of field operations through electrification of equipment.

The push for electrification is driven by a simple goal: replace high-emission, high-maintenance diesel generators with cleaner, often grid-supplied or battery-backed, electric power. The global oil and gas electrification market is expected to be valued at $2.1 billion in 2025. While the U.S. market's growth is slower than others, projected at a 7.7% Compound Annual Growth Rate (CAGR), the trend is defintely toward electric-powered equipment, which is forecasted to comprise 24.5% of the broader off-highway equipment market by 2029.

This creates a capital-intensive challenge for oilfield service companies. The initial cost of replacing diesel fleets with electric motors, battery storage systems, and the necessary infrastructure is substantial. However, it offers significant long-term operational savings by reducing fuel and maintenance expenses. Nine Energy Service, Inc. noted in its 2024 Annual Report that increased scrutiny of sustainability matters could adversely affect the business, so having an electrification strategy for its coiled tubing and cementing fleets is critical to stay competitive.

Increased cost and complexity of sourcing and disposing of water used in fracturing operations.

Water management is a major cost center in hydraulic fracturing, and it's only getting more complex due to scarcity and regulation. In the U.S. land market, the average cost of sourcing fresh water is about $0.60 per barrel, but the average trucking and disposal cost is a much higher $1.50 per barrel. This logistics cost is the real killer.

This cost dynamic is forcing a pivot toward recycling. You should know that the industry is projected to see an approximately 36% compounded annual growth rate for recycling produced water between 2019 and 2025. Recycling is becoming an economic necessity, not just an environmental choice, as it can offer cost savings of 30% or more, with an average recycling cost of around $0.70 per barrel. The North American fracking water treatment market, valued at approximately $4.9 billion in 2024, is the global leader in this shift.

In water-stressed regions like Texas, where groundwater availability is projected to drop 25% by 2070, the pressure to reuse water is intensifying. This mandates that service providers integrate water-compatible chemistries and operational practices.

Focus on developing and deploying more environmentally friendly cementing and chemical additives.

The market for specialty oilfield chemicals, which includes cementing and fracturing additives, is massive, valued at $20.60 billion in 2024 globally, and driven by the demand for environmentally compliant solutions. This is where innovation directly impacts Nine Energy Service's core business.

The trend is clear: operators are demanding less toxic chemicals that minimize ecological impact. This includes low-carbon cement alternatives and high-performance polymer-based products for drilling fluids and cement additives. Major competitors have already made moves in 2025:

• Schlumberger introduced high-performance cementing additives in August 2025 focused on better zonal isolation and reduced formation damage.
• Baker Hughes developed advanced biocides and scale inhibitors in July 2025, prioritizing environmental compliance.

These innovations aim to strengthen wellbore integrity, reduce gas migration (a major methane source), and lower the overall carbon footprint of the well construction process. For Nine Energy Service, Inc., maintaining a competitive edge requires continuous R&D investment in its own cementing and completion tool chemistries to meet these stringent new environmental standards. The global Cement Concrete Additive Market, which includes these specialized products, is projected to be valued at $21.3 billion in 2025.